Trading the SETUP
Often times many traders focus on the money rather than the set-up. They find themselves in unwanted situations. That loss they took could have been avoided, only if they waited for the actual set up. Patience play an important role when trading. The set-ups land right into your lap when you just sit and wait. Trading the sets-ups can give you a higher probability of a winning trade; less emotions are involved.
Setups are formed every day, through various chart patterns such as Channels, Ascending and Descending Triangles, Inverse head and shoulders, head and shoulders etc. Many traders have a hard time trading particular patterns to due to the time frame. The Larger the time frame the BIGGER the Move. The smaller the time frame the SMALLER the move, it’s not just perspective it’s actuality.
Friday after I made the Majority of my Gains by trading my Strategy, at some point I seen a set up being established on WYNN. WYNN was in an uptrend throughout the morning, and knowing market dynamics, I entered in a short position as the “first” highs were established.
After I covered for $1.51/share, I sat back and watched, and noticed the flat top, as the price was forming higher lows. An Ascending triangle with the base being at $67.00, Now since WYNN was in an uptrend, technically Ascending triangle breakout higher, resuming trend. I cautioned the group.
I took the trade for an average of .91/share Gain. Entering the trade as it broke the triangle, with a retest then a fail. I covered knowing that the move was going to be quick. WYNN then set in a “double bottom” at the break, Nearly same lows, signifying this was a Blotched Break Down (Wouldn’t hold)
As the double bottom set in, a 3rd trade was placed taking WYNN to new highs taking WYNN to nearly a $3/share gain. Just by simply waiting for the setups.
Setups occur all the time, It’s just that most traders do not know what to look for.
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